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The Dow Jones Industrial Average (DJIA) experienced sideways trading with a negative bias in the previous session, encountering resistance at the 39803 level and closing around 39447.
Technical Outlook:
On the 60-minute chart, several bearish signals have emerged. The simple moving averages (SMAs) are exerting downward pressure, while the 14-day momentum indicator shows clear negative signals.
Downside Potential:
Given these factors, we lean towards a negative outlook, but with caution. As long as the index remains below the 39530 resistance level, and more importantly below 39630, a further decline is likely. Breaking below 39390 could open the door for a drop towards the initial target of 39290, with potential for further losses towards 39130.
Potential Reversal:
Traders should be aware that a close above 39530 on the hourly chart could postpone the decline and potentially lead to a recovery towards 39630. However, the overall trend would only be invalidated with a sustained move above this level.
Key Levels:
- Resistance: 39530, 39630
- Support: 39390, 39290, 39130
Important Note:
The release of high-impact U.S. economic data today, including job vacancies and labor turnover rate, along with a speech by the Federal Reserve Chairman, could induce significant price volatility. Traders are advised to exercise caution and closely monitor market reactions to these news releases.
Disclaimer: Trading in CFDs carries inherent risks, and all scenarios are possible. This analysis is not investment advice but rather an interpretation of the current technical landscape for the Dow Jones Industrial Average.
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